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“I would die and go to hell before I would sell an annuity,” billionaire Ken Fisher said in a 2018 ad (1) for his investment firm, Fisher Investments. In an op-ed written for Forbes a few years earlier, he called the financial instruments “scumbag products.” (2)
So if someone in a nice suit is scaring you into adding annuities to your retirement in 2026, should you send them in the same direction?
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Well, before you do that, it’s worth understanding what annuities are designed for, why they get such a bad rap and whether they’re a good fit for your personal finances.
Understanding annuities (and why they’re often pushed)
Annuities are designed to offload risk for anxious investors.
At a basic level, these are contracts that investors sign with insurance companies to lock in regular income payments in retirement, according to US Bank (3). And that market has grown rapidly.
In 2025, annuity sales totaled $460 billion — nearly double the 2020 total and marking the fourth consecutive record-breaking year, according to LIMRA (4) and Plan Advisor (5). Much of this growth seems to be driven by the need for peace of mind.
A whopping 97% of annuity owners said they worry less about running out of money in retirement, while 88% said it has eased concerns about a stock market downturn, according to Bloomberg (6).
However, the downsides of these products are often overlooked.
According to Fisher Investments, annuities could have excessively high fees, restrictive lock-up terms, high surrender charges and misleading interpretations of “guaranteed returns.”
The firm also highlights potential conflicts of interest.
“Annuity providers often reward their salespeople with large commissions that are built into the policy,” says the Fisher report.
Simply put, annuities could be useful for some people, but you need to be vigilant to make sure they’re the right fit for you. This is especially true if your savings exceed $2 million.
Protect yourself
If you’re relatively affluent or a multimillionaire, annuities may not be an appropriate fit.
You probably don’t need to lock up assets or expose yourself to surrender fees when you’re less likely to run out of money in retirement.
Nevertheless, if you’re considering an expert opinion, consider hiring a fee-only financial advisor who is also a fiduciary to minimize conflicts of interest.
These advisors are legally obligated to put your interests first and a flat fee can eliminate the temptation to push financial products for commission.
Platforms like Advisor.com can help you find such advisors. Just enter a few details about your finances and goals andAdvisor.com’s AI-powered matching tool will connect you with a qualified expert best suited for your needs based on your unique financial goals and preferences.
The platform also lets you set up a free initial consultation, with no obligation to hire, to see if they’re the right fit for you.
At this level of wealth, you might also have alternative ways to generate predictable cash flows that don’t require an annuity. Rental property or certificates of Deposit (CDs), for instance, can generate the recurring income you’re seeking.
A platform like CD Valet can help you find higher-yield options that work for you, whether you’re saving for something soon or building a cushion for the long haul.
CD Valet tracks over 40,000 verified rates from FDIC-insured banks and NCUA-insured credit unions nationwide. Unlike other websites, they show every publicly available rate, ensuring you have a comprehensive view of the market.
Plus, their CD rates are updated continuously, so you can shop, compare and open CDs with ease.
Mogul also offers fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or 3 a.m. tenant calls.
Founded by former Goldman Sachs real estate investors, the team handpicks the top 1% of single-family rental homes nationwide for you. Simply put, you can invest in institutional-quality offerings for a fraction of the usual cost.
Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10% and 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.
Annuities might be an effective tool for those with limited means, but if your nest egg is relatively large, you don’t need to make long-term financial decisions driven by fear.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Vimeo (1); Forbes (2); U.S. Bank (3); LIMRA (4); Planadviser (5); BlackRock (6)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
